COUNTRY REPORT
Australia 21 China 24 Hong Kong 30 India 32 Indonesia 34 Japan 34 Malaysia 36
New Zealand 36 Philippines 37 Singapore 37 South Korea 39 Taiwan 41 Thailand 42 Vietnam 42AUSTRALIA
DEBT CAPITAL MARKETS
› AMP TAPS SWISSY FOR SFR50M
Troubled Australian financial AMP GROUP,
rated A2/A (Moody’s/S&P), tapped its
0.75% December 19 2022 bond by SFr50m
(US$52m) last Wednesday to take the size
of the line up to SFr160m.
The reopening via sole lead Credit Suisse
priced at 100.327 for a yield of 0.671%, in line
with mid-swaps plus 85bp area guidance.
The original SFr110m 4.5-year sale on
June 5 also priced 85bp wide of mid-swaps
having met some push back from Swiss
investors given that initial soundings were
notably tighter at 65bp–70bp.
› SVENSKA MAKES KANGAROO RETURN
SVENSKA HANDELSBANKEN (Aa2/AA–/AA) raised
A$900m (US$647m) from last Wednesday’s
dual-tranche five-year senior unsecured
Kangaroo bond offering.
A A$700m floating-rate note priced inside
100bp area guidance at three-month BBSW
plus 98bp.
A A$200m 3.25% fixed-rate tranche
priced at 99.441 to yield 3.3725%, 98bp over
asset swaps.
Citigroup, TD Securities, UBS and Westpac
were joint lead managers.
Picing wass 1bp tighter than the 99bp
margin paid by Bank of Montreal (Aa2/A+/
AA-) for its A$1.25bn two-part five-year
Kangaroo sale on August 31.
Svenska Handelsbanken previously
visited the Kangaroo market in February
2016 with a A$500m five-year FRN priced at
three-month BBSW plus 150bp alongside a
A$125m 4.00% 10-year bond at 156bp over
asset swaps.› NAB FIVE-YEAR NETS A$2BNNATIONAL AUSTRALIA BANK (Aa3/AA–/AA–) raised
A$2bn from last Tuesday’s self-led dual-
tranche sale of senior unsecured five-year
bonds.
A A$1.725bn five-year floating-rate note
priced just inside 94bp area guidance at
three-month BBSW plus 93bp.
A A$275m 3.25% five-year fixed-rate
tranche priced at 99.931 for a yield of 3.265%,
93bp over semi-quarterly asset swaps.
Pricing matches the 93bp margin
for Commonwealth Bank of Australia’s
A$1.9bn dual-tranche five-year issue on
August 8.Earlier in the year, Westpac raised
A$2.6bn from a two-part five-year offering
on February 26 at 83bp over BBSW and
asset swaps, which was 6bp wider than the
77bp spread paid by ANZ for its A$1.75bn
deal on January 9.
NAB also repurchased A$500m in total
of the following FRN lines: A$102m of
its November 8 2018s at a clean price of
100.084 to give a spread of 25bp; A$22.5m
of its February 25 2019s at 100.275 or plus
34bp; and A$375.5m of its May 20 2019s at
100.326 or plus 36bp.› BFCM READIES SP KANGAROOBANQUE FEDERATIVE DU CREDIT MUTUEL, rated
Aa3/A/A+, has mandated HSBC and NAB
to arrange a potential inaugural five-year
Kangaroo senior-preferred unsecured bond.
On September 13, fellow French bank
Societe Generale raised A$550m from a dual-
tranche senior non-preferred note offering
in the Eurobond market that included a
A$450m 3.925% five-year tranche.› IFC TAPS NET A$125MINTERNATIONAL FINANCE CORP, rated Aaa/AAA
(Moody’s/S&P), raised A$125m from two
taps of existing Kangaroo bond lines earlier
this month.Australia breaks linker records
Bonds Liquidity, duration and inflation outlook underpin investor demandStrong, broad-based demand allowed the
AUSTRALIAN OFFICE OF FINANCIAL MANAGEMENT to
print its largest issue of Treasury indexed
bonds last Tuesday in a syndicated sale at
the tight end of guidance.
The A$3.75bn (US$2.6bn) 1.0% February
21 2050 TIBs was just under half the
A$7.78bn order book at the clearing price.
The deal beat the previous A$3.0bn record
size for the sale of November 2027 TIBs in
August 2017, which attracted A$5.033bn of
demand.
Domestic investors bought 73.5% of the
new bond with offshore accounts taking
26.5%. North America was allotted 10.8%,
the UK 6.5%, Europe 4.1%, Asia ex-Japan
1.1% and others 4.0%.
Fund managers picked up 71.8%, hedge funds
11.8%, bank trading 10.1% and others 6.2%.Bank of America Merrill Lynch, Citigroup,
Deutsche Bank, UBS and Westpac were joint
lead managers for the trade, which priced at
96.035 for a yield of 1.16%.
This was at the tight end of final 9bp–11bp
guidance over the 1.25% August 21 2040 TIBs
and 151.5bp below EFP (10-year futures). Initial
price talk was 9bp–13bp over the 2040 TIBs.
A DCM manager on the trade said it ticked
a lot of boxes for investors who are looking
for liquidity, duration and see plenty of value
in inflation-linked bonds.
“Investors are increasingly focusing on large
primary market deals that offer liquidity points
while inflationary expectations at home and
abroad are rising as wage/price pressures
build and, potentially, if trade wars deepen,
the price of imports increases,” he said.
The manager also emphasised the AOFM’ssimultaneous buyback of A$2.074bn of the
4.0% August 20 2020 TIBs that released a
lot of money for reinvestment.
The new February 2050 bond extends the
sovereign index-linked curve almost 10 years
beyond the August 2040s.
Australia is expected to issue around
A$70bn of government bonds in 2018-19,
most of which will be raised from tenders of
around A$1bn each week.
In addition to the 2050 linker, the AOFM
intends to open a December 2030 nominal
bond line via syndication in the current fiscal
year ending on June 30 2019.
The A$2.074bn repurchase of the 4.0%
August 20 2020 TIBs, which priced at a real
yield of 0.24%, left the remaining volume of
the bond at A$3.04bn.
JOHN WEAVERS